P/E (price earnings ratio) is a measure often used and cited for stock analysis. Commentators will often appeal to the masses by quoting lines of: "Buy this stock now! It is selling at such a low P/E ratio"
But is it a reliable measure? Let's use the complete past 3 year financial results (excluding one-offs) of Ezion Holdings and Penguin and the share price these companies were selling for slightly after the announcement of their full year financial results on the SGX.
FY end |
Ezion EPS |
Share price (start Mar) |
P/E ratio |
2013 |
16.06 |
163.5 |
10.2 |
2014 |
16.53 |
97.6 |
5.9 |
2015 |
2.33 |
62.5 |
26.8 |
FY end |
Penguin EPS |
Share price (start Mar) |
P/E ratio |
2013 |
2.49 |
15.2 |
6.10 |
2014 |
4.56 |
21.5 |
4.71 |
2015 |
1.41 |
13 |
9.29 |
*All figures above are ...
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